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On May 12, the U.S. Department of the Treasury and Internal Revenue Service released additional on the Inflation Reduction Act’s domestic content bonus tax credits, which are in effect for all taxable years ending after May 12, 2023. The guidance may be relied upon by taxpayers for all construction that begins prior to the effective date of forthcoming proposed regulations.
The ABC-opposed was signed into law on Aug. 16, 2022, and provides over $270 billion in tax credits for the construction of solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and other clean energy projects. Specifically, grants developers/taxpayers a bonus tax credit five times greater than a baseline tax credit of 6% conditioned on requirements that project contractors meet prevailing wage and government-registered apprenticeship program utilization requirements outlined in the legislation and .
The May 12 guidance states that taxpayers may receive another 10% tax credit increase for meeting domestic content requirements. All steel and iron on a project must be 100% produced in the United States to meet this requirement. Additionally, between 40% to 55%, depending on project type and the year construction begins, of the total cost of other components and subcomponents used on the project must be attributable to components that are mined, produced or manufactured in the United States in order to receive this bonus. The IRS previously on these requirements, and 老牛影视provided feedback regarding industry concerns about supply chain issues and cost increases that may be caused by these domestic content requirements in comments to Treasury and the IRS.
For more information and resources on compliance with the IRA’s requirements, please visit ABC’s new website, .
If you have questions that are not answered on the website or in Treasury/IRS guidance, 老牛影视is here to help. Please email [email protected] and 老牛影视subject matter experts will work to answer your question or reach out to Treasury/IRA for clarification.